Canadian bigger pockets investing

58 Replies

Hey,

I’m new to the bigger pockets forums and I currently reside in British Columbia Canada. Are there any fellow Canadian investors here that could point me in the right direction as to where I should start ?

What markets are reasonably affordable with acceptable returns would be a great starting point !

@Jesse Graham   Depending where you are in BC, finding rentals can be hard.  Do you want something local or are you willing to invest long distance?

BC has a few things that other provinces don't. I know BC and AB the best and have rentals in both provinces.  BC has a property purchase tax that will add to the expense of purchasing a rental and in the lower mainland and many parts of Vancouver Island, the housing prices are high.  Prices have leveled off, but for parts of Vancouver Island like Parksville and Qualicum, you're looking at $250K for a condo as a starting point.  Nanaimo has some lower prices, still high, but lower than the surrounding area.  I've heard Port Alberni is the same and has affordable rentals.  If you are on the mainland and in the south, look at the Cranbrook area.

If you are willing to invest in another province, then there are more options.

@Theresa Harris

So far I have my eye on the okanagan area, I’ve been watching it for a while as I save up my initial investment and educate my self.

I am very interested in Alberta but I don’t know a lot about the the towns and what the rental market is like, but the prices there are quite appealing. Unfortunately the 20 or so books I’ve read talk mostly of America.

I am currently living in the Fraser valley but I have no desire to invest here. My hope is to put 20% down and do some nice cosmetic renovations before putting it on the rental market

Originally posted by @Jesse Graham :

@Theresa Harris

So far I have my eye on the okanagan area, I’ve been watching it for a while as I save up my initial investment and educate my self.

I am very interested in Alberta but I don’t know a lot about the the towns and what the rental market is like, but the prices there are quite appealing. Unfortunately the 20 or so books I’ve read talk mostly of America.

I am currently living in the Fraser valley but I have no desire to invest here. My hope is to put 20% down and do some nice cosmetic renovations before putting it on the rental market

 The Okanagan is a nice area, and pricier.  Timing the market is also important, especially in an area like that.  I'd avoid purchasing in the summer when prices will be higher.  In the fall people who were serious about selling their house and didn't sell it during the summer may lower their price and take a lower offer.

A bit further north, but what about Salmon Arm?  I know a few people who moved there.

@Theresa Harris

I had the same thought about waiting for fall to buy, the summer seems to give prices a small but noticeable increase. Between Kamloops and salmon arm I would definitely lean towards Kamloops. They have a university and a well established hospital, I don’t think salmon arm has the same level of stability when it comes to businesses/employment

Originally posted by @Jesse Graham :

@Theresa Harris

I had the same thought about waiting for fall to buy, the summer seems to give prices a small but noticeable increase. Between Kamloops and salmon arm I would definitely lean towards Kamloops. They have a university and a well established hospital, I don’t think salmon arm has the same level of stability when it comes to businesses/employment

 Some of the smaller towns are surprising.  Revelstoke is one of those where housing prices are crazy relative to the size of the town and the rents are high.  I know someone who moved from Revelstoke to Salmon Arm a month ago and I have some family that live in Salmon Arm.  They have a branch of the Okanagan College there.

@Jesse Graham It's a bit of a tough market to start investing in right now.  There's not a lot of a great cash flow deals, they are getting snatched up quickly.  

A lot of it comes down to risk vs return in my eyes. If all you are concerned about is a high CAP rate, there are small towns all over BC that look great on paper and will spit out lots of cash, but I'd be cautious about investing in small towns unless you know that market very well and have boots on the ground to help you out. I live in Cranbrook BC, I'm still finding 8% CAP rate deals out here, although they are not sitting on the MLS like they used to be.

If you base your decision on cash flow, population growth and job growth, over the long run you will have an excellent investment.  There won't be a "holy grail" location to invest in, so maybe start with places where you have friends or family or where you can find a trustworthy property manager. the worst thing you can do it sit on the sideline and not pull the trigger.

@Jesse Graham I think places like Cranbrook, Kamloops, Revelstoke etc all have deals that can work. You need to know as much about each place as possible. Every city/town has its good areas, bad areas and niches you could get into.

I invest in Port Alberni and Prince George. I live 30 minutes from Port Alberni and go there weekly, so I drive the neighbourhoods, know the infrastructure, know the demographics etc etc. I have a very good friend and investor that lives in Prince George, and he knows all the little details about that city, which has been extremely valuable.

What I'm getting at is, it's probably more important to become an expert in one or two towns than it is to know which town is better. I'm sure I can find better deals in Port Alberni then @Greg Eaton  could, but he can find better deals in Cranbrook than I can. Either pick a couple of towns that work best for you and become an expert, or partner with someone that is already an expert in a town you are interested in.

By the way, congrats on getting in Canadian Real Estate Wealth magazine Greg! I saw your name and Cranbrook and put two and two together! Great article! I'd love to pick your brain about the hotel you bought.

@Jesse Graham one thing to be aware of, wherever you decide to invest, is to read the entire landlord-tenant act for the province. Besides BC having more tax on the front end when purchasing a property, they have some of the most tenant-friendly laws you can find. Good luck to you trying to remove/evict a tenant that knows their rights and wants to be difficult. Disputes are handled through arbitration (read some past cases to see how biased the arbitrators are - who also have who knows what qualifications and you permitted to record the session.) and not the court. My parents recently went through this for months with their rental on Vancouver Island. It was only through a stroke of luck their tenant ended up leaving, and I consider them EXTREMELY lucky that he only left a filthy mess and didn't pay the last half-month's rent.

Because of the extra taxes and the tenant friendly laws, and compared to AB, I don't think there could be a deal good enough for me to want to park my money in an investment there, but that's just me, and something to be aware of.

@Jesse Graham

There is still deals to be had all over the Okanagan. I just snagged a nice SFH in Kelowna in April with 2 suites 1 x 3b/2ba and 1x 3b/1ba. Its solid cash flow, in great shape, and I got it for what I believe to be a favorable price.

With that said I had to look through a lot of properties before I found one that was a good investment and good cash flow.  

Here a few tidbits of my opinion based on my experience and research.  I'd suggest you form your own opinions of course :)  

1) Kelowna: Has a strong rental market, but It may be tough to find strong cash flow on a property with only one suite.  

2) Kelowna: The summer Short term rental combined with Off season student rental combination is making folks big cash flow right now, but it is growing more competitive.  

3) BC: I second the comment made by @Brianne H.

4) Vernon:  If you spend the time to look you can find deals here  

5) Have good Math.  :) 

6) Buy something you are prepared to hold.  Some people think we are late in the market cycle.  I'm not going to spark the debate in your thread, but it does make sense to ask yourself "am I ok holding this for 5-7 years if I need too? whats that look like financially?"

7) Real Estate is very seasonal in the Okanagan like @Theresa Harris mentioned.  You can see it in the Data.   If you can find a decent property in Dec or Jan that is probably optimal.  

Good luck with your ventures, mate. If you are ever in the area and want to grab a beverage and discuss REI feel free to reach out.

Originally posted by @Greg Eaton:

A lot of it comes down to risk vs return in my eyes. If all you are concerned about is a high CAP rate, there are small towns all over BC that look great on paper and will spit out lots of cash, but I'd be cautious about investing in small towns unless you know that market very well and have boots on the ground to help you out. I live in Cranbrook BC, I'm still finding 8% CAP rate deals out here, although they are not sitting on the MLS like they used to be.

If you base your decision on cash flow, population growth and job growth, over the long run you will have an excellent investment.  There won't be a "holy grail" location to invest in, so maybe start with places where you have friends or family or where you can find a trustworthy property manager. the worst thing you can do it sit on the sideline and not pull the trigger.

 Cranbrook is a lovely town.  I agree that if you have the money and can find a place where the numbers work, it is a great time to go for it.  Interest rates are still low and there are many places close to BC (southern Alberta) where you can find places that cash flow and don't cost $300K+.

@Brianne H. Thanks for the input I appreciate it ! I’ve heard that about the bc rental act and I’d be lying if I said it didn’t worry me.

Right now it’s between Kamloops, Lethbridge, and Leduc. Still have a few months before I have to decide. If distance wasn’t an issue I’d be all in for Alberta

Originally posted by @Jesse Graham :

@Brianne H. Thanks for the input I appreciate it ! I’ve heard that about the bc rental act and I’d be lying if I said it didn’t worry me.

Right now it’s between Kamloops, Lethbridge, and Leduc. Still have a few months before I have to decide. If distance wasn’t an issue I’d be all in for Alberta

I don't know Leduc, but I have a rental in Lethbridge and use a PM.  It is a good market for rentals and house prices are reasonable.  There are small areas I wouldn't buy in, but overall it is a great town. 

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